Biotech investors finally got a dose of good news this week. Illumina Inc (NASDAQ:ILMN) staged a powerful comeback, with the stock surging over 23% on Friday after topping its third-quarter guidance while narrowing its full-year revenue decline forecast. Now, the rally of this genomics firm has rippled through the ETF space, offering a glimmer of hope for funds tied to the once high-flying sector.
Illumina, a leading DNA sequencing technology company, said third-quarter revenue came in flat at $1.08 billion from a year earlier, topping views. Although net income plunged to $150 million from $705 million, the company’s guidance for fiscal 2025 was upbeat: revenue would fall only 0.5% to 1.5% versus the prior view for up to a 2.5% decline, it said. CEO Jacob Thaysen noted that the firm returned to growth ex-China and that revenue accelerated in the clinical segment, which is the largest market.
ARKG And Biotech ETFs Catch A Tailwind
This rally in Illumina proved a shot in the arm for one of the most Illumina-sensitive funds, the ARK Genomic Revolution ETF (BATS:ARKG). It surged about 4% this week to outperform broader biotech benchmarks. Its peers, the iShares Biotechnology ETF (NASDAQ:IBB) and the SPDR S&P Biotech ETF (NYSE:XBI), inched up as sentiment toward the sector improved.
ARKG, helmed by Cathie Wood’s ARK Invest, had faced significant headwinds in 2024 amid weak genomics earnings and rising rates. Illumina’s rebound offers the fund a narrative reset, one that hinges on the potential for renewed innovation-driven growth in precision medicine, oncology, and reproductive health technologies.
Ex-China Pivot Reshapes ETF Exposure
Illumina’s 2% year-over-year growth outside China highlights how geopolitical shifts are rewriting the biotech map. With China’s ban on Illumina’s DNA sequencers cutting off about $300 million in annual sales, ETF investors are increasingly leaning toward funds with U.S.-heavy exposure and less reliance on Chinese revenue streams. While it is yet to be seen whether Illumina’s recovery is sustainable, its latest earnings have given biotech ETFs a much-needed jolt. If the genomics leader can maintain its momentum, it may help spark broader inflows into a sector that’s been largely written off this year.
Read Next:
Image: Shutterstock
